European PR: Managing Europe

Is the job of a CEO Europe becoming increasingly redundant in PR agencies? The question has to be asked when you look at the evidence.

Weber Shandwick (WS) president of international operations Lutz Meyer quit the company last September but was not directly replaced. The same is true of Porter Novelli (PN) European CEO Neil Backwith, who also left this year.

Major international operators, such as Sun Microsystems, have recently cut out a European layer of management, insisting instead that country managing directors report to the chief operating officer direct.

But not all is as it seems. If you have a few European offices handling local work, the role may not be necessary. 'However, it's clear that you can't develop or manage a business in Europe or the UK from the US,' says Ketchum CEO Europe Jon Higgins.

Tackling the Continent's patchwork quilt of legal, cultural and regulatory frameworks appears to cry out for a single figure with cross-border authority to consistently manage costs, define delivery, supervise quality, spot economies, marshall creative talent, oversee regular reviews, demonstrate ROI and provide a single point for billing.

'Market-neutral' programmes

As more clients want to embark on 'market-neutral' programmes, agencies need to have someone with a similar regional perspective and the ability to deploy resources wherever they are needed.

Edelman CEO Europe David Brain says: 'That does not have to be the head of Europe, but it does have to be someone with genuine international experience, perspective and the authority to make things happen.'

Most agencies agree but they don't always call that person a CEO Europe.

While clients are obviously interested in who is working on their business, they are less concerned with what's written on their business card. They simply want results from their Europe-wide programmes.

Both WS and PN say the previous roles handled respectively by Meyer and Backwith contained large elements of micro-management that is simply not relevant to their own situations, and those of their market, today. Yet both now have people who fulfil a European brief, albeit with a slightly different emphasis.

Micro-management

WS European chairman Tim Sutton explains: 'In 2001, Weber and Shandwick hadn't been merged for that long. Meyer's job was immensely valuable and he had a lot to deal with.

'We were faced with immediate problems and time-consuming questions, operational issues. Three years on, with settled, integrated businesses, we were not going to directly replace him,' he adds.

It was a similar situation at PN, says Anthony Wreford, CEO Europe of DAS, the marketing services business of Omnicom that oversees the agency. 'When Backwith was CEO, a lot of the owned businesses were relatively new to Porter Novelli,' he says.

'That integration has now been done. We haven't replaced him because we are at a stage of development that needs to be handled in a different way. But I would not say we would never put a new Europe CEO in, although it's working quite well as it is at the moment,' he adds.

Sutton's role is to help WS's European offices grow and increase profitability - although how they conduct business appears to be largely up to them.

He says that while he is not scrutinising budgets he is not ignoring them either, being mainly concerned with 'quality, consistency, intellectual property, delivery - all the things that, if we do them well, make us money and keep clients happy'.

Europe-wide management

However you choose to do it, Europe-wide management does not come cheap.

'When clients really want pan-European management they are happy to pay for it,' says GCI Europe chairman Adrian Wheeler. 'When clients want multi-country co-ordination to happen as if by magic, they need to find an agency that lives in financial never-never land, because it takes skill and experience to make this work, and that costs money.'

The crucial thing is to ensure it is not a bottom-line cost and to do this the chief executive must be, in some way, client-facing.

'Clients are interested in knowing there is someone in charge of their activity,' says Grayling group CEO Nigel Kennedy. 'But in any PR business the people in charge must be client handlers. There isn't room for full-time managers who don't generate revenue.'

Whether the European role is defined as a facilitator or a performance management centre, agency staff will be looking for it to provide a combination of help with financial management, existing clients, new business and general profile.

PR consultancies have learned from industries such as advertising, management consultancy and accounting, where international operations are a less recent phenomenon.

Wreford says: 'In the 1990s, a lot of people fell in love with managing.

Every PR network was guilty of it as people removed themselves from business relationships. But you must never let go of aspects of client work.'

Questioning agencies' European CEOs on whether or not their role is important is akin to asking turkeys how they enjoy their cranberry sauce.

Nevertheless, that 'CEO-type' role appears here to stay. As Higgins adds: 'Self-serving as it may sound, there's a certain leadership required to bring this all together.'

While no consultancy shows signs of doing away with the role completely, markets are always changing and therefore ways of organising your business change too.

Sutton says: 'There is never a right management structure in place. Clearly you try to maximise the best structure at any one point.'

But there appear to be a couple of golden rules when dealing with pan-European management, whatever you call the position: one, it needs to be client-focused and two, he or she must bring in revenue.

SHOULD YOU HAVE A EUROPEAN CEO?

YES - MICHAEL MURPHY, INTERNATIONAL CEO, TRIMEDIA

Communications Europe 'If you don't have a European CEO, you cannot operate successfully if you are one organisation. Europe is obviously not one market - it is a series of marketplaces, expanding and becoming more complex all the time.

'Central and Eastern Europe is but one example. You need expert country CEOs and senior management in each of those countries, but alongside that you need a small central team that supports and enables, who understands the uniqueness of each market but also understands the client wants one strategy sensitively delivered to the greatest effect.

'Europe-wide management is not a burden, it is an essential. PR companies are no different from other firms. They need management to establish the vision, develop and lead the implementation of the strategy, provide leadership and ensure consistent standards.

'Clients prefer to know there's a "head of Europe". They look to the person with whom the buck stops to ultimately deliver the quality and consistent service. Our European management is very lean - three people.

We manage with a light touch concentrating on adding value for European clients. Our European management and country CEOs are members of our international board who run the company and are also very "hands on" with clients. We focus on key sectors such as consumer brands and transport and logistics. These ensure we understand our clients' marketplaces on a country-by-country basis.'

NO - ADRIAN WHEELER, CHAIRMAN, GCI EUROPE

'I don't know. We haven't got one. We don't have a European Profit&Loss either; we have an unusual system among our 28 European offices whereby each one is independent and stands on its own two feet, albeit wholly or majority-owned by GCI (ie Grey Global Group).

'What GCI has instead is a European chairman, which is currently me, whose job is to collect and manage a fund aimed at practice development and knowledge-sharing on behalf of the collective.

'(If it did not have a CEO-type figure) the agency would lack a central recourse where clients could ring if something had annoyed them or if they felt the relationship on a local level was in danger of going awry.

'From the agency's point of view, the CEO or chairman can take a Europe-wide view of the resources available against the multi-country pitch opportunities in sight, and co-ordinate new business activity accordingly.

'But you have to ensure you separate the agency's internal need for good organisation and management from the clients' need to get things done.

'If the agency has a pan-European P&L it needs - ipso facto - a European CEO to drive bottom-line results. This is all about resource management and making investment decisions, in talent and acquisitions, in line with the agency's EMEA strategy.

'Simple in principle, tricky in practice - and only tangentially connected with good client service.'